LLC Formation Glossary
Articles of Organization
The legal document that is needed to create an LLC in your state and that is filed with the Secretary of State.
Certificate of Conversion
The legal document that is needed to convert an existing business, such as a sole proprietorship or partnership, to an LLC.
Employer Identification Number (EIN)
A federal tax identification number for your LLC. In essence, the EIN is the social security number of your business.
LLC (Limited Liability Company)
Also sometimes called a limited liability corporation, a business entity that is between a sole proprietorship and a corporation from a tax and legal perspective.
Operating Agreement
The official document that specifies the way the LLC will be operated and the duties of the owners.
Pass-through Taxation
This means that the taxes on the earnings of an LLC are only taxed once, unlike that of a C-corporation.
PLLC (Professional Limited Liability Company)
An form of LLC that is required in some states for professionals that require a license to provide services, such as doctors, lawyers, accountants, engineers and architects.
Publication Requirement
The notice of intent, published in a local newspaper, to create an LLC that a few states require for LLC formation.
Principal
Another term for the owner of an LLC.
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